Mobile Problems Cost Steve Ballmer Half His Bonus

Microsoft CEO Steve Ballmer got some good news and bad news in this year’s annual proxy filing with the SEC: On the one hand, his company’s board commended him for posting record revenues for fiscal 2010; on the other, the board was less sanguine about the ill-fated Kin and Microsoft’s failure to compete with “new form factors” (i.e. tablets like the iPad). For the former, he earned half his maximum bonus, but for the latter he lost the other half.

“For fiscal year 2010,” the company said in its filing, “Mr. Ballmer’s Incentive Plan award was $670,000, which was 100% of his target award.” The filing stipulates that his maximum bonus is 200% of his base salary — in other words, he was awarded $1.34 million out of a maximum of $2.01 million.

Mr. Ballmer is not given stock options, and he already owns 4.75% of Microsoft, some 408 million shares valued at more than $10 billion, according to Reuters.

Microsoft offered Mr. Ballmer kudos for several aspects of the company’s operations, listing: Mr. Ballmer’s performance against his individual commitments; the strong financial year in which Microsoft reported a record $62.5 billion in revenue and $24.1 billion in operating income.”

The company also mentioned Mr. Ballmer’s fiscal responsibility, and the successful launches of Windows 7, Office 2010, Bing, Windows Server, and SQL Server, as well as unspecified products that are “under way.”

On the negative side, Mr. Ballmer was dinged for, “the unsuccessful launch of the Kin phone; loss of market share in the company’s mobile phone business; and the need for the Company to pursue innovations to take advantage of new form factors.”

I completely disagree about the BoD. Ballmer has screwed up everything he’s touched since taking over. Cutting his bonus in half? Phttt. They need to toss him out and get someone with a clue where the industry is going. Someone who can plan for the future and not react to what has happened.

Now that’s the computer geek that works on bad Windows systems, old and new talking. The Apple guy in me is happy with him being right there. If MS had gotten its act together over the last 10 years OS-X, the iPhone, and Apple could be in a lot worse position.

other side12:51 PM EDT, Oct. 2nd, 2010Guest

Wow! A Board of Directors that actually does its job overseeing the performance of management!

There is hope for Microsoft and, perhaps, American capitalism after all.

Problem is the Board DID NOT do it’s job by failing to fire Ballmer & have him escorted immediately off campus.

Ballmer is one of the most incapable and unqualified people to hold any position (much less be CEO) in any corporation, ever.

HOW he manages to keep his job, much less get ANY bonus, is beyond comprehension. Perhaps the board fears he will go gorilla if they take any meaningful action.

A BONUS? I spent a “few” years (22 + 17 days) in the US military. If a major commander had such “success” as Ballmer has, he/she would be fired and told to retire. (I’ve seen it happen at least 7 times.) Those commanders are paid a small fraction of what Ballmer is, yet they may command more people and oversee more money. They are held more accountable than Ballmer is. Heck, I would bet that lower- and mid-level managers at Microsoft are held more accountable than the CEO is.

To put this into perspective, the Chief of Staff of the US Air Force makes ROUGHLY 250K—235K or so in direct payments plus benefits and the effect of non-taxable allowances. He leads an organization with about 500,000 full-time employees (330K military, 177K civilian, not counting Guard and Reserve members) and an annual budget of about $160 billion. That’s nearly 4 times as many employees as Microsoft and 2.5 times the company’s revenue. Even the President of the US doesn’t make as much as Ballmer did with his “reduced” bonus.